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Mr. Hugo Swire (East Devon): I am left with the almost impossible task of following the high oratory of the hon. Member for High Peak (Mr. Levitt), but I shall attempt to do my level best. Indeed, I wish to emulate the hon. Member for Glasgow, Anniesland (John Robertson), who at the commencement of my speech vacated the Chamber. Were he here, I would point out to him that my constituency, East Devon, is also home to many pensioners. I think that it has one of the greatest concentrations of pensioners in the countrythat is, of course, of those who are not in Glasgow, Anniesland.
For pensioners, the problem with pensions is that they are too complicated. According to Government estimates, 1.7 million pensioners receive payments under the minimum income guarantee, but Help the Aged estimates that some 2.5 million pensioners are entitled to such support. In other words, only one in five of those eligible claim the minimum income guarantee. Some suggest that that equates to as many as 770,000 people, all of whom are losing an average of £22 a week, thereby saving the Government nearly £900 million a year. That is a poor reflection on a flawed system.
Pensioners are, rightly, proud. Many do not wish to be in receipt of benefits when they would be satisfied with what they regard as an entitlement. That is often at the root of it all. The minimum income guarantee claim system, which is designed to overcome the stigma of means-testing pensioners, is not working. It has cost more than £50 million to date, with no significant increase in the number of pensioners taking up their entitlement. The introduction of the pension credit is expected further to add to the complexity of the means test, and will bring more than 50 per cent. of pensioner households into the claims-led process of the minimum income guarantee or the pension credit. How does that square with the Department for Work and Pensions information sheet, which clearly states:
This afternoon, the Secretary of State said that the Government have a responsibility to those who save. Dead right they do, but there is precious little evidence of their practising what they preach. What about those who saved all their working lives to take out private medical insurance and not be a burden on the state, only to see the tax benefit swept away, forcing many of them back on to an already overstretched national health service? That was one of the incoming acts of a pernicious Government. What about those who have suffered as a result of being forced to purchase annuities at the age of 75? It has taken a Conservative Member, my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), to introduce a Bill to reform that requirement.
In my constituency I have many pensioners and many pensioner activists, not least Mr. Venison and Mr. Applebee, whom I warmly congratulate on their forming of the Devon and Cornwall pensioners convention and the Devon action forum. A Minister promised some time ago on a radio phone-in programme that he would go to visit them, but they are still waiting.
Mr. Swire: I am extremely grateful to the Minister; as usual one must wait for a public announcement, rather than a response to a private letter. None the less, I am grateful for an answer for which the pensioners to whom I referred have been waiting for a year and a half or two years.
The Minister will be aware of the grey power of these pensioner conventions and forums. They are getting increasingly fed up with not being listened to and, as they see it, with being preached at. They are no longer happy to remain a silent minority.
Help the Aged has said that the Government's approach to pensioners reflected widespread discrimination against older people in public policy. Research has shown that one in two Britons believe that older people are treated as if they were on the scrap heap. That is not exactly a ringing endorsement of the Prime Minister's approach and I suspect that that is a sentiment shared by his father-in-law, who is active in these matters.
Another worrying factor is the crisis of confidence that the Government have now created. There was the derisory 75p rise in the pension and, as we have heard this afternoon, the £5 billion a year raid on pensions resulting from the reforms to advance corporation tax. We have also seen the acceleration in closures of final salary pension schemes resulting from that short-sighted act. The Prime Minister has argued that the market has compensated because the stock market is now doing so well. My belief is that the stock market has come off another 130 points today, so that argument now rings rather hollow.
Yesterday, we had the most recent admission: that the Government have been working on grossly over-estimated figures for the level of contribution to funded pension arrangements. All these factors are making the savers of todaythe pensioners of tomorrowdeeply cynical about the idea of a pension at all.
When that is combined with the worrying drop in the savings ratiowhich is at its lowest since records began in 1963we begin to get some idea of the scale of the problem. There is a very real possibility that millions of people will retire without enough money to live on.
It is not just the pensioners whom the Government must now seek to convince. It is all those people in work who are thinking about their retirement and do not wish to be dependent on the state, which, to my way of thinking, is always an unreliable source of largesse.
The value of assets in our pension funds is falling. The proportion of recently retired pensioners with occupational pensions has declined from 67 per cent. to 59 per cent. between 199798 and 2001. The proportion of workers without a funded pension has risen from 40 per cent. to 44 per cent. in the last two years.
Of course we understand the demographic problems and the fact that people are living longer. Of course we appreciate that radical solutions are now needed. I am interested in the possibility of raising the age of retirement and being more flexible about the dividing line between being in work and being retired. But this crisis is a crisis of the Government's own making and solving it requires a commitment that, to date, has been sadly lacking.
There are still plenty of troubling cases of poverty among pensionersnot least the failure of all those entitled to means-tested help to claim it. But average pensioner incomes have risen faster than the rest of society in recent years, and the average newly retired pensioner has never had it so good."